CHUD.com Community › Forums › THE CHEWERS › The Chewers Catch-All › Property Valuation and Taxes question
New Posts  All Forums:Forum Nav:

Property Valuation and Taxes question

post #1 of 10
10/18/06 at 4:53pm
Thread Starter 
I don't know if anyone here has gone through something like this, or even has any knowledge of the system, but I had a question about my current situation.

Quick version:
My escrow payments just went up by a hell of a lot (almost 150%), so I went searching around (this is my first home, so I'm new at this), and found out through the county auditor's website that my home value went up over 150% from 2004 to 2005 unbeknownst to me.

Besides being relatively absurd in and of itself, I went from being in the lower 1/3 (house value-wise) on my street to being #1. Yay, I win! This seems like an obvious clerical error (seeing as we haven't done anythinig to improve the house... and hell, I've properly devalued it due to my poor landscaping abilities!).

So, I call the auditor's office, and they tell me the protest period is up (ends in March apparently). The money from 2005 is gone. They say I can protest in January, 2007 to try to get my taxes straightened for 2006.

I asked to know that if it was an obvious error on their part, if I had any recourse to get my 2005 overpayment back. They said, "no." Are they being jackasses about it? Or am I really screwed on that 2005 money?

They said they are not required to tell me that my property changed value, and that it is up to me to pay attention. This is my first home, and I didn't realize something this absurd could happen.

Anyway, any thoughts? Anyone deal with something like this before? Anyone having any legal background know if I'm screwed?

I did call someone else whose name they gave me when I demanded the algorithms they used to revalue houses, but she is "out of office" until Monday... and today is Wednesday. Yippee!

*edited for poor grammar*
Reply
post #2 of 10
10/18/06 at 5:04pm
I work at a cpa firm in chicago; I know we see this a lot for our clients and it might be worth your time to get some help in protesting this. If interested visit www.thehechtmangroup.com and visit the "contact us" page. Regards,
Marco
Reply
post #3 of 10
10/18/06 at 5:16pm
I don't own a house, so I'm not too familiar with this, but I do find it a little interesting. How does the escrow thing work? You pay into an escrow and then the county or city or state takes funds from that escrow?

I once worked in my city's tax collector's office for two weeks. Here in Providence there is a pretty steep excise tax on cars. When I was there a whole bunch of people were coming in complaining about past due tax notices they received for taxes that didn't know they owed. However, the law was that the city didn't have to notify people they owed these taxes - it's their responsibility to keep up with it themselves. Same thing with income tax - it's just a big one so everyone knows it comes on April 15 every year and just does it.

Regardless, taxes just suck in general. That sucks that you have to go through that crap.
Reply
post #4 of 10
10/18/06 at 5:52pm
Thread Starter 
Quote:
Originally Posted by irie1972
I work at a cpa firm in chicago; I know we see this a lot for our clients and it might be worth your time to get some help in protesting this. If interested visit www.thehechtmangroup.com and visit the "contact us" page. Regards,
Marco
Thanks for the quick response. So, people in my situation have gotten money back from previous years if an error was found? (I felt you were implying this, even though it was not explicitly stated.)

Any thoughts on how much it usually costs to protest this?
Reply
post #5 of 10
10/18/06 at 5:56pm
Thread Starter 
Quote:
Originally Posted by stump
I don't own a house, so I'm not too familiar with this, but I do find it a little interesting. How does the escrow thing work? You pay into an escrow and then the county or city or state takes funds from that escrow?

I once worked in my city's tax collector's office for two weeks. Here in Providence there is a pretty steep excise tax on cars. When I was there a whole bunch of people were coming in complaining about past due tax notices they received for taxes that didn't know they owed. However, the law was that the city didn't have to notify people they owed these taxes - it's their responsibility to keep up with it themselves. Same thing with income tax - it's just a big one so everyone knows it comes on April 15 every year and just does it.

Regardless, taxes just suck in general. That sucks that you have to go through that crap.
Thanks for the empathy.

I don't remember all the intricate details of how escrow works (although I did ask 3 years ago when we bought the house, and I felt I understood it pretty well then), all I know is my mortgage company pays for me, and I pay them. I don't know who they pay... if they pay the government directly, or if there is a middle man, I'm no expert. I just know I pay them (the bank), and they update my escrow charges every once in a while... but they update later than the changes occur, so I onlty found out something was wrong this September, even though my taxes had technically been higher for over a year.
Reply
post #6 of 10
10/18/06 at 7:17pm
Sorry to hear the bad news, but I think you may be screwed. Counties and states (whomever levies the tax on your home) can adjust it at any time. Once the value is adjusted, you will see the new value on your next tax bill. It is up to you to review the tax bill. If you try and fight this they will say they did notify you and you did nothing. They must send you a tax bill each year. I bet you got it, but didn't notice the increase in the estimated value of the home.

When they increase the value you have a right to request an auditor come in and explain the increase and how the value was calculated. If you disagree I believe you can provide detail in writing on why you disagree, what you feel the accurate rate is, etc. I know some people have hired private estimation firms to use in these cases. My father in law fought it himself by sending a certified letter without hiring a private firm or estimation.

Anyway, just like a homstead exemption (and if this is your first home find out ASAP if your county/state offers this...will save you hundreds a year on your tax bill) you must respond in a certain period of time. If you do not, and they say you did not, you are relinquishing your right to fight the adjustment. Which is why I think you're hosed unfortunately.

P.S. For the escrow question, it works like this. Most people have their mortgage company pay their taxes and insurance bill on their homes. The bills for insurance and taxes (taxes has to, insurance does not) usually go to the actual homeowner with a message saying that they have billed the mortgage firm and this is just an FYI. It is however the homeowner's responsibility to ensure the mortgage company actually gets and pays the bills.

A mortgage holder makes escrow payments each month. Many homeowner's don't realize this because they just pay one bill to the lender. That one bill often covers the principal, interest and escrow. The lender holds that escrow money until the tax and insurance bills come, and then they pay it out of escrow. Of course your taxes and insurance may change each year. So your lender does an annual review to ensure you are paying the right amount. If they find you are paying too little (like in kungfu's post) they increase your monthly escrow payments. And, like in kungfu's note, if the yearly tax bill is a lot more and the escrow estimate was way low they will send you a bill to pay the large increase ASAP for the prior year...and make you pay more going forward to prepare for the next year. Some lenders find that the lendee is paying too much in escrow and refunds some of the money to the homeowner. Of course that doesn't happen often.

FYI, paying escrow is a bad idea. The bank is collecting interest on your escrow account and making money...on your money. If you are financially responsible it is MUCH better to set aside the escrow money yourself and then pay the tax and insurance out of your pocket each year. Many lenders however force you to use them to store escrow. Some good ones (like ING Direct) do not.
Reply
post #7 of 10
10/18/06 at 10:29pm
Thread Starter 
Thanks for the extremely informative post, Judge.

This is my first house, and I know nothing about Homestead exemptions, I'll have to look into that.

After hearing you talk about Escrow, I believe I was screwed into doing it that way through my mortgage company. When I was shopping for the house originally, my wife and I were planning our wedding and honeymoon, getting married, looking for a house, getting ready for grad school, and lots of other fun, but stressful things... so I didn't research things as well as I should have.

I'm definitely going to be filing a protest in January, which (if it works) will bring my 2006 taxes down to a reasonable level. I suppose if that works out I'll at least only be out the 4-5 months in 2005 after the revaluing of my house.

I know the notice you are talking about letting you know your property taxes and adjusted home value because I save "important" documents with reckless abandon and file them all compulsively, and I have ones from previous years, but I cannot find one (or remember one) for the 2005 year. Maybe it got lost in the mail or I tossed it with some junk mail one day, who knows.

Ah well, I'll at the very least be fighting for my 2006 taxes that haven't been paid yet, and I'll keep a wee little thread of hope for my 2005 overpayments, but I'll assume nothing will come of it.
Reply
post #8 of 10
10/19/06 at 12:20am
Good luck kungfu, hope everything works out. As for Homestead Exemptions, I'm not sure if they are everywhere. I live in GA and here they are very prevelant. A good friend of mine bought a home in '01 and had no idea and just filed it for the first time in '05. He was pissed he missed out on 4 years. I only knew about it b/c when we bought our first home the realtor told us to file it.
Reply
post #9 of 10
3/7/07 at 8:15pm
Thread Starter 
Nobody probably cares, but those of you offering advice and kind words, everything got worked out.

After enough phone calls and getting my message to the "higher ups," I was refunded my 2005 overpayment last month, and will have my 2006 payment reduced to the appropriate level.

I've also contacted my bank and have found out how to get out of doing my taxes through an Escrow account.

Yay!

Thanks again for all the help.
Reply
post #10 of 10
3/7/07 at 9:17pm
Great news, good job kungfu!

JS
Reply
New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: The Chewers Catch-All
CHUD.com Community › Forums › THE CHEWERS › The Chewers Catch-All › Property Valuation and Taxes question